IT IS certainly good to see British Airways taking a step that really does recognise the value of travel agents in selling their product.
The Guild of Business Travel Agents has said all along that airlines alter the commission structure at their peril because it risks undermining the standard distribution system, which has worked so well for them.
Why would anyone in business want to disrupt a tried and tested process which sells (as BA admits) 80-85% of their product?
Although BA’s Interim Agency Bonus plan is not perfect, it has to be said that it is heading commission back towards the level needed to cover the cost of making air travel bookings.
The investment made by agents in acting for the airlines and providing the service standards which corporate customers require has to be paid for.
Our most recent calculation – presented directly to all the world’s leading airlines at last year’s International Air Transport Association’s Tariffs Conference – showed that 10.65% would be about right!
In fact it might be an even higher percentage by now, with scrutiny of company travel costs intensifying, the whole task becoming more complex and the service demands upon us greater than ever.
That is why the GBTA has initiated a study amongst corporates, called Value Plus, to evaluate in more detail what our customers need from their business travel agents, and to put a cost to it.
That’s fair enough. The corporates are the ultimate customers of us all, both agents and airlines. But these services have to be paid for.
It was fashionable, a couple of years ago, for profitable airlines to suggest that the corporates themselves should shoulder more of these costs.
Perhaps much less profitable airlines, currently struggling to win back their business customers, may think it less politic to make such a suggestion now.
Having said all that, there is no doubt that BA has made a good start at mending some fences and we especially welcomed the consultation process which took place.
But let us not forget that this scheme is actually named ‘interim’ and has only a seven-month term.
I would like to see, over the next few months, even more openness and consultation in developing a long-term plan which takes this all a stage further.